Are you ready for the private cloud? [WHITEPAPER]


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Key considerations when assessing the private cloud and how to know whether it's right for your business.

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Are you ready for the private cloud? [WHITEPAPER]

  1. 1. WHITE PAPER: KVH Cloud Services Are you ready for the private cloud? Key considerations when assessing the private cloud and how to know whether its right for your business. Table of Contents 2 Introduction 3 Why Adopt the Private Cloud 5 Step-by-step decision process 7 What requirements do you have of your service provider? 9 Summary 10 Case Study – Financial Private Cloud 11 About KVH Copyright© 2012 by KVH Co. LTD All Rights Reserved. Not to be copied or reproduced without express permission of KVH Co LTD Page 1 of 12
  2. 2. Are you ready for the private cloud? scalability required to support business growth andIntroduction fluctuations in product demand.The amount of data generated globally is doubling However, the Internet boom and thisevery two years, creating immediate and strong consumerization together have introduced ademand for reliable systems that enable businesses multitude of new security threats to businesses, andto process and protect their data. Simultaneously, the rise of social media has created even moreCIOs are being put under extreme pressure to meet channels for these threats to spread and growthese new technology needs with tightly restricted throughout an employer’s network. Consequently,IT budgets. Gartner’s Amplifying the Enterprise: The data security and privacy, particularly for2012 CIO Agenda recently found that IT budgets businesses with mission-critical data such as those inare expected to increase by a mere 0.5% in 2012, the financial services sector, has become a highalthough 46% of CIOs believe their actual spending priority and concern for many businesses. This haswill exceed their budget restraints. led to the evolution of the private cloud, where businesses can use their own infrastructure in anThe emergence of cloud computing1 has isolated cloud environment, while also leveragingintroduced new ways for businesses to address the high-quality hosting, security, network, andthese needs by storing their data on off-site managed services of their service providers.machines accessible over the Internet and/or Unfortunately, with the influx of businesses enteringprivate connectivity to significantly decrease this space and with the technology constantlyinfrastructure and maintenance costs. Therefore, as advancing and evolving, a lot of terminologycloud computing enables enterprises to more surrounding cloud computing has becomecost-efficiently manage their IT environments, it is confused, and many businesses are still unaware ofnot surprising that CIOs have reported “Cloud exactly what the cloud can offer them andcomputing (SaaS, IaaS, PaaS)” as one of their three whether or not they should be adopting this newhighest technology priorities for 2012. technology.With the consumerization of IT, cloud services Data and technology trends show that almost allenable users to access their data from anywhere at businesses will need to adopt cloud computing inany time to improve business productivity, and with some form or another eventually.the continuously changing IT and business needs oforganizations, the cloud provides the flexibility and For businesses looking to adopt the private cloud, this whitepaper aims to explain its potential benefits, and how to make the right decisions when1 Cloud computing is a model for enabling ubiquitous, choosing to make the shift and when selecting aconvenient, on-demand network access to a pool ofconfigurable computing resources (e.g. network, servers, service, etc.) that can be rapidly provisioned and deliveredwith minimal management effort. Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 2 of 12
  3. 3. Are you ready for the private cloud? of new malware using the internet as its primaryWhy Adopt the Private Cloud? attack vector, there is now a serious need among organizations for reliable and thorough security solutions that cover the company’s entireThis section outlines the key IT challenges operations. Particularly, for companies with highlyenterprises are currently facing, how the private confidential data, such as those in the financialcloud can address these challenges, and how services, data leaks or security breaches can bebusinesses can sufficiently prepare and plan to detrimental to their success and reputation.effectively experience these benefits once theirprivate cloud is up and running. As each business Internet-based access for public cloudwill vary in their existing IT systems, internal resources, environments increases the risk of contamination ofstaff skill-sets, and data service needs, the extent to data from unknown, outside sources. On the otherwhich each company will experience these hand, private cloud environments ensure yourbenefits will heavily depend on their capacity to infrastructure run on separate networks and serverssmoothly migrate to the private cloud, as well as from other companies in a secure environment.their service provider’s capabilities in supporting These private cloud environments lead to minimalthe migration and addressing the company’s risk of being tainted or affected by other customers’particular challenges and needs. environments and deliver guaranteed performance of the infrastructure.Security and Privacy Maximize Cost-EfficiencyGlobal IP traffic is multiplying in volume every year,and is expected to multiply five times by 2013. In IT budgets are becoming increasingly restricted asaddition to this growth, social media, desktop businesses are desperately looking for morevirtualization, and the consumerization of IT are cost-effective ways to manage their IT needs byintroducing a plethora of new ways for malware to doing “more with less”. For most, this means findingspread through employers’ networks, and with 85% ways to cut the costs of their hardware, software, Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 3 of 12
  4. 4. Are you ready for the private cloud?and information security services, while increasing effectiveness of a private cloud environment, whilebusiness productivity. also shifting your CAPEX to OPEX for optimal long-term cost-efficiency.Most cloud computing environments contain serverorchestration capabilities that provide centralized Increased Controlmanagement of the server resource pool, includingbilling, metering, and chargeback for consumption. Private cloud is ideal for businesses that want a highServer orchestration also defines the policies and level of control over their IT environment. This couldservice levels through automated workflows, be applicable to companies with high securityprovisioning, and change management, thereby concerns or that deal with highly confidential orcreating an application-aligned infrastructure that mission-critical data. As a private cloud is highlycan be scaled up or down based on the needs of customizable, it allows businesses to set up theireach application. Considering that servers in servers and networking gear at their desiredlegacy environments are heavily underutilized, specifications to meet their unique requirements.effectively running at 15-20% capacity, server Whether these requirements stem from specificorchestration can reduce the number of idle regulatory or compliance issues, or whether theyservers and drive overall server utilization to over have been imposed from an overseas HQ, the80%. For example, it is feasible for a particular set of private cloud environment can be customized toservers to be provisioned at night to run a set of these needs and, in many cases, this would extendapplications and reimaged in the morning to run a beyond server specifications to specializedset of completely different applications. Such reporting, monitoring, and supported serverre-use of underutilized resources not only reduces expenditures, but also decreases energyconsumption by 70-80% and yields reductions in Moreover, since the environment is not shared withpower costs and server maintenance. other customers, private cloud adopters can access and change their environment as it isFor in-house private cloud adopters, the total cost running and adjust their settings as they wish, whileof ownership of a private cloud environment can also benefiting from the 24x7 monitoring andbe extremely high without the experience or technical support, as well as the on-demandexpertise internally to help identify where cost professional consulting of their data center servicesavings can be made while still developing a providers.solution that meets the business’ specificrequirements. Private Cloud System Integrators Scalability and Flexibility(SIers) have professionals with the right skill-sets, Private cloud services enable businesses to scalebusiness partners with the most cost-effective their IT infrastructure according to their businessequipment, and high-performance and highly needs. For businesses launching a new productsecure infrastructure that can boost the Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 4 of 12
  5. 5. Are you ready for the private cloud?with unforeseeable demand in the marketplace, organizations assess the potential impact of athey can increase or decrease the amount of IT cloud service on their internal architecture, thoughresources they are using depending on actual 71% of organizations are either currently in somedemand after it is launched, which significantly stage of a network re-architecture project orsaves on cost in cases of low demand and expect to be within the next 24 months. Withoutefficiently supports business growth in cases of high making this critical assessment, it is almost certaindemand. Also, as business needs change regularly that businesses will face unexpected problemswith evolving customer demands and markets when developing, customizing, and implementingtrends, the flexibility to provision services enables their private cloud, not to mention the difficultiesbusinesses to seamlessly change their IT that will arise when monitoring the cloud servicesenvironments without negatively impacting their and measuring their workflow. Furthermore, shifting to the cloud requires a major change in the way a company functions and itsStep-by-step decision process core internal processes. If each department in an organization is not appropriately prepared to makeWith all the capabilities of the private cloud, it can this change, the project could not only fail, but itbe tempting to sign up with the first service provider could potentially raise problems and issues amongthat promises the aforementioned benefits. teams that will further delay the company fromHowever, it is important to recognize that certain reaping the cost and efficiency benefits cloudservice providers will be more suitable to particular computing can offer. In particular, silos within abusinesses and industries than others, and that the company, such as a particular department orextent of benefits received will depend on the team that is not working collaboratively orcapabilities of the service provider to meet your effectively with the rest of the organization, couldbusiness needs. The following are some basic become a major hurdle in the process of shifting toconsiderations to keep in mind when deciding on the private cloud. It is important to assess thewhether to make the shift to the private cloud, and company’s organizational structure and existinghow to choose the best service provider for your internal processes to decide whether or not it isbusiness when the time is right. ready for a company-wide adoption of the private cloud.Structurally, can your company handle thischange? Is your internal staff prepared?Cloud migration can involve significant Who is going to run this internally? Is there thearchitectural changes to a company’s IT systems skill-set and expertise internally that can efficientlyand networks. The InformationWeek 2012 State of manage this project on an ongoing basis? It isCloud Computing Survey found that only 28% of IT highly beneficial to have an internal person or Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 5 of 12
  6. 6. Are you ready for the private cloud?team, depending on the size of the company, who they may rely on a public cloud to handle excesshas the technical background as well as a deep data flow. Before adopting a private cloud service,understanding of the business, to work effectively it is important to assess whether a public or hybridwith the service provider to implement the private solution may better suit your, manage any issues that arise, and actuallyunderstand any changes that need to be made to Where will you house it?the environment as the business changes. Inaddition, the service provider should be able to By managing and maintaining a private clouddemonstrate their expertise in running private cloud environment in-house, it ensures the company hasenvironments as well as an understanding of their complete control over the environment, and thatcustomers’ core business and the challenges that the security risks involved are, theoretically,they face. If your staff are not sufficiently trained, or minimized since it is isolated from other cloudif the service provider cannot make up for the gaps environments and networks. For some businesses,in your staff’s skill-sets, moving to the private cloud this may seem like a strong reason to host their ownwill be significantly more time consuming and private cloud, though the impacts that this willcostly than necessary. have on other areas of the business should also be kept in mind.Are public or hybrid options better suited to yourbusiness model? For example, if the private cloud is hosted on-premise, are there people with the necessaryFor businesses looking to utilize a great number of skill-sets available to attend to the cloudservers and for those that are using hosting solutions, environment on a 24x7 basis in cases of outages, orthe public cloud would be better suited as it when hardware needs to be added or changed?provides a low-cost service that can handle high Businesses considering this option for securityvolumes of data. Meanwhile, as mentioned reasons would need to ensure their infrastructure ispreviously, for businesses that have strong security being monitored at all times with the highest levelconcerns or strict compliance and regulatory of security services and professionals who can actfactors to consider, the private cloud can better quickly and efficiently when needed. Furthermore,meet these requirements. the in-house facility and internal staff would need the capabilities to support and manageHowever, it is becoming increasingly apparent that uninterrupted power supply systems (UPS, buildingwith the unpredictable nature of data growth and generators, etc.) that are required in case of powerInternet traffic, many businesses will inevitably outages and mandated building-wide power tests.begin to adopt a “hybrid cloud” solution, which is acombination of both the public and private cloud. Also, unless infrastructure management is a coreFor example, a business may use a private cloud for component of your business, spending the time,a certain application, and during spikes in demand money, and resources on developing and Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 6 of 12
  7. 7. Are you ready for the private cloud?maintaining a private cloud environment could be assessments. To meet security compliance needs,wasted efforts. What will be saved from a security ISO certifications will determine whether aand privacy perspective could be lost from a provider’s infrastructure meets domestic andbusiness productivity and cost-efficiency international security standards.perspective. Private cloud service providers thatspecialize in this space would not only be able tooffer a customized, low-cost solution to meet theircustomers’ security, data volume, and budget What requirements do yourequirements, but their professional services and have of your service provider?consulting capabilities will ensure that their range Before selecting a service provider, ensure youof capabilities are effectively leveraged to have a clear proposal of what challenges youimplement the project as seamlessly as possible. hope to overcome and what goals you anticipateWith all that is saved in time and money by reaching by adopting a private cloud. This will helpoutsourcing, customers can focus their resources determine the kind of service most appropriate toand efforts on strengthening their core business your business and what kind of service provider willcompetencies. best be able to meet your needs.Is compliance an issue for your business? Firstly, confirm your performance goals, whichStrict compliance issues can cause great difficulty could include processing needs and responsefor businesses trying to develop and manage their times. This will influence the geographical proximity,own private cloud environments. When assessing network performance needs within and outside theservice providers, these kinds of businesses, cloud environment, and the choice of computingespecially those in the financial industry, should be resources regarding CPUs, disks, and storageaware of their provider’s ITIL2 competency, as well their TIPA and ISO certifications. Providers that Secondly, assess whether you need ahave implemented ITIL training and procedures Software-as-a-Service (SaaS), Platform-as-a-Serviceacross their organization will be able to align and (PaaS), or Infrastructure-as-a-Service (IaaS) solution.integrate their support procedures more effectively. As most providers will either specialize in one areaITIL competency can be measured via TIPA or have a combination of these capabilities to a certain extent, you will need to choose the provider that can offer the best services in the field2 ITIL (Information Technology Infrastructure Library) provides acohesive set of best practices, drawn from the public and you need. The type of solution will also affect theprivate sectors internationally and supported by a roles of your internal/end-customer IT support staff.comprehensive qualifications scheme, accredited trainingorganizations, and implementation and assessment tools. Formore information, visit the official IT website at: Thirdly, question whether you need an SLA and, if so, Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 7 of 12
  8. 8. Are you ready for the private cloud?which cloud provider can offer it guaranteed. Your throat to choke” if there are any issues, reducingSLA will influence the requirements you place on the number of relationships, support processes, andthe cloud provider and the architecture needed skills that would be required internally to managefor the solution. Internal staff or the cloud provider’s multiple vendors.Professional Services will need to have thecapabilities to design a system architecture based How well does your provider understand youron the building blocks available from the cloud needs?provider. The type and volume of data being generatedDoes your cloud provider own and manage and handled will differ across the financial, media,networks as well? carrier, and manufacturing industries, and will further differ depending on the size, location,Private cloud hardware and infrastructure costs growth patterns, and products of each company.include networks, switches, circuits, servers, and As such, the service providers that manage, store,more. Providers that develop these products as process, and protect the data of each of thesewell as offer cloud services will most likely try to sell companies and industries will need to be able toall of their products in a single offering. While this demonstrate their capabilities and experience ingreatly benefits the provider, this can often limit the these fields. Your service provider needs tocost savings and quality of service for the customer. understand your industry, your core business area,Similarly, while some providers may specialize in a and the challenges that you are facing with yourparticular product and be able to offer that data, to ensure that the contracts and conditionsproduct at a significantly low price, the customer of the provided services are agreed upon in awould still need to find other vendors that can common technical language.provide the remaining missing pieces of theirprivate cloud. Also, for businesses that have operations across several international offices, the service providerAlternatively, service providers that have system needs to be able to offer services in multipleintegration capabilities can combine languages to streamline communication betweenhigh-performance, best-in-class devices from the provider and customer, as well as minimizevarious vendors to offer lower end-to-end cost for a downtime in times of crisis or when changes needsignificantly higher quality service. Furthermore, to be made to configurations in a timely manner.with the high level of network sophisticationinvolved in cloud services, the best providers are What is the value-add?those than can offer integrated cloud andnetworking solutions that have comprehensive SLAs Every private cloud service provider will claim theyacross the environment. These providers will ensure offer the best service available in the industry, butbetter integration with legacy systems and “one the key differentiating factor between them and Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 8 of 12
  9. 9. Are you ready for the private cloud?their competitors will be the value they can add to level of control over their IT environment. This wouldyour business beyond the basic service. be applicable to companies with high security concerns or that deal with highly confidential orAs well as multilingual support capabilities, mission-critical data. As a private cloud is highlybest-in-class infrastructure, highly regarded expert customizable, it allows businesses to set up theirconsulting, and solid ITIL implementation among servers and networking gear at their desiredother certifications, what else can they offer? Do specifications to meet their unique requirements.they offer networks, security, managed services, Private cloud environment can be customized toproximity services, and backup capabilities? Assess these needs and, in many cases, this would extendhow your service provider can support your private beyond server specifications to specializedcloud environment, while also meeting your other IT reporting, monitoring, and supported server imagesneeds. and applications. There are many factors to consider when selectingSummary your external IT services provider. What level of SLA do you require and is your cloud serviceWith the amount of data generated globally provider capable of providing a one-stop solutiondoubling every two years and CIOs under extreme in being able to manage networks as well? Whatpressure to meet these new technology needs with degree does the service provider understand yourtightly restricted IT budgets, the adoption of cloud industry and are there specific compliancecomputing environments is moving into the main considerations that need to be understood andconsciousness of most businesses. Cloud factored into the implementation? Whatcomputing represents a shift away from traditional professional services capabilities does the providerIT consumption models to delivering IT as a service. offer that will allow you to implement this project asWhile the benefits of cloud computing in terms of smoothly as possible and position you best toflexibility, speed of deployment, and reduced receive the full anticipated benefits?capital and operating costs are proven, there arevarious types of cloud deployments, such a Moving to a private cloud environment, whether a“public,” “private,” and “hybrid” to choosing from. significant IT migration or a smaller deployment, isSelecting the most appropriate cloud will be not easy for most companies. Selecting the rightdependent upon such factors internal policies for service provider with the appropriate infrastructure,security and compliance, level of desired technical expertise, and service portfolio will allowcustomization, and internal technical skills and businesses to overcome their technical andinfrastructure for managing and hosting the resource challenges and to implement a solutionenvironment. that is most appropriate to their specific needs.Private cloud is ideal for businesses that want a high Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 9 of 12
  10. 10. Are you ready for the private cloud?Case Study – A Closer Look at a Financial Private CloudChallenges in Financial ServicesBusinesses in the financial services sector need to meet strict industry standards (such as Basel III for banks),reach low latency levels to stream market data feeds and/or conduct high-frequency trading, andeffectively protect their confidential and mission-critical data with highly reliable systems. Some of the keychallenges these businesses face include maintaining modern security levels that address the needs ofthe entire company and the range of current and emerging security threats, managing robustinfrastructure with lower IT budgets, and finding ways to focus purely on their core competencies infinance rather then spending time and resources on maintaining their IT systems.A leading global financial services company was faced with the above challenges, as well as thedifficulties of not having the internal resources and skill-sets to effectively migrate their entire IT systems tothe private cloud. With several thousand applications that needed to be hosted on several hundredservers in a secure and private cloud environment, and a range of upcoming demands for tradingsolutions, reliable data backup, and significant cost reduction, they decided to leverage the expertconsulting and high-performance infrastructure and networks of a private cloud service provider.Solution – The Private CloudThe customer adopted a secure, private Infrastructure-as-a-Service (IaaS) environment of ApplicationServers with Dedicated WAN connections to their data center, as well as a remotely accessible ControlCenter through which they could efficiently manage their IaaS environment. They also leveraged theirservice provider’s Professional Services, Project Management Services, and Private Cloud Consultingprofessionals to provide performance analysis of their private cloud environment, and also to conduct athorough analysis of their requirements to assist in creating the customer’s internal business case foroutsourced application grid server farms.They received the highest level of security through their service provider with ISMS-ISO 27001 Certificationfor data center services, SAS70 and FISC Compliance, Caged data center environments, secure anddedicated WAN lines direct to the customer’s data center locations, Due Diligence Auditing, and ControlCenter Software developed in-house by the provider for the sole operation of the customer.Benefits - Maximize Control and Cost-Efficiency Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 10 of 12
  11. 11. Are you ready for the private cloud?The solution enabled the financial services company to significantly decrease TCO of their infrastructurewith greater scalability and flexibility in payment and delivery options, meet their extensive security needs,and also reach a high level of control over their Private Cloud environment through their Control Center, aserver management software service that uses the latest web technology. The Control Center allows thecustomer to personalize their display based on server status, control their server power, provision machines,and share status updates with other customers of the service provider.Furthermore, the service provider offered disaster recovery (DR) planning, a back-officeDesktop-as-a-Service (DaaS) solution to increase flexibility for employees, and a global network of lowlatency connectivity to enable the monitoring, analyzing and optimizing of market data feeds. The overallsolution not only met the initial needs of the customer, but also provided added value and support to thecore areas of their business, allowing the financial services company to save time, money, and resources,while improving the way their IT systems are managed and maintained and focusing on the services thatgenerate profits for their business. Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 11 of 12
  12. 12. Are you ready for the private cloud?About KVHKVH was established in Tokyo in 1999 by Fidelity Investments as a Japan focused IT / communicationsservice provider. As an information delivery platform that allows enterprise customers to store, process,protect and deliver their vital business information, KVH offers integrated cloud and network solutions thatinclude infrastructure-as-a-service, managed services, data center services, professional services, datanetworking, internet access, and voice services. KVH operates the lowest latency network in Japan, andwith over 450 financial services customers, is the leading provider of ultra low-latency network andproximity hosting solutions to the high-frequency trading community in Tokyo and Osaka. KVH also offerslow-latency connectivity services between major financial markets in the Asia/Pacific region and the USincluding Tokyo, Chicago, New York, Singapore, Hong Kong, Shanghai, and Sydney.More information on KVH can be found at Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 12 of 12